Should I stay or should I travel? An analysis of increasing petrol prices on travel behaviour

Abstract

This paper examines how rising petrol prices affect weekly travel behaviour, with particular attention to modal substitution and trip suppression. The analysis draws on stated responses from 808 Queensland residents, each of whom first reported their travel behaviour for the week prior to the survey and then indicated how that behaviour would change under three hypothetical petrol price scenarios set at AUD 2.50, AUD 3.00, and AUD 3.50 per litre (noting fuel prices at the pump varied between an average of AUD 2.20 and AUD 2.53 during the survey period). Weekly trip frequencies are jointly modelled for eight travel outcomes, including car travel as driver, car travel as passenger, public transport, taxi, rideshare, cycling, walking, and avoided trips. The latter category is included within the hypothetical setting to capture the extent to which increase in petrol prices may lead travellers to cancel or forgo trips altogether, rather than simply reallocate travel across modes. The empirical analysis is performed implementing a multivariate Generalised Poisson framework with dependence across travel alternatives introduced through a Gaussian copula. The results indicate that higher petrol prices substantially reduce car travel both as driver car passenger, while increasing public transport use, particularly at the higher price scenarios. However, the substitution towards public transport is only partial. A sizeable share of the adjustment instead occurs through avoided trips, suggesting that fuel price increases are more likely to suppress travel rather than simply induce a reallocation across modes. The findings further show that behavioural responses vary with socio-economic circumstances and perceived transport disadvantage, implying that the burden of higher fuel prices is unevenly distributed. Overall, the paper shows that rising petrol prices affect not only mode choice, but also the ability of individuals to maintain everyday mobility and activity participation.